LONDON Nov 23 Peter Cruddas, one of the City of
London's most prominent supporters of a British exit from the
European Union, is confident that Brexit will be good for
business at his retail brokerage CMC Markets, despite
an immediate hit.
CMC Markets, which floated on the London Stock
Exchange earlier this year, reported a downturn in revenues on
Wednesday, knocking another 4 percent off its share price, which
has fallen by a third since early September.
Chief Executive Cruddas said the revenue fall was due to a
slump in client trading, driven by retail investors scared that
volatility around the shock vote in June's referendum would
spark chaos similar to that around the Swiss franc last year.
"No one is more depressed about that than me," Cruddas told
Reuters of the share price fall.
Cruddas and his wife have a 62.5 percent stake in the firm,
and have lost about 145 million pounds ($180 million) on paper
as a result of the share price fall, according to Reuters
calculations, although they would have received around 9.6
million pounds in dividends.
"After the result...clients sat on the sidelines, we kept
our margins high. We pretty much lost a month to it. Brexit
hasn't caused the downturn in our business. It was the run-up to
the referendum. It is industry-wide."
Cruddas told Reuters ahead of the vote that he expected the
opposite, with any volatility in the pound likely to spur retail
investors in currencies to take more not less risk.
Only three founders of FTSE 350 companies publicly backed
Brexit, albeit in a personal capacity, and the impact on their
share price performance, as well as that of CMC peer IG Group
, has been mixed. reut.rs/2g2BP18
While Peter Hargreaves has lost around 400 million pounds on
the value of his 32 percent stake in financial services firm
Hargreaves Lansdown, according to Reuters calculations,
shares in pub chain JD Wetherspoon have risen.
Wednesday's results showed CMC's net operating income down 4
percent to 75.5 million pounds while revenue per active client
sank 13 percent to 1,488 pounds.
But Cruddas and CMC's chief financial officer, Grant Foley,
remain bullish, pointing to another shareholder dividend as
evidence they are confident of hitting their revenue target of
220 million pounds by 2020.
"We are not that focused on the share price," Cruddas said.
"Whilst it is painful to see the share price not perform and the
company not hit numbers...we will stick to our strategy."
"Medium and long-term we think the referendum is going to
generate good business for us. Client money is up, new accounts
are up. The stuff we're doing is working."
($1 = 0.8041 pounds)
(Editing by Alexander Smith)